From May 1, it will be possible to import products such as beef, poultry, dairy products, sugar and ethanol into the EU at tariffs favorable to South American producers.
However, the discount will only apply to the quantities of a given product specified in the contract. In return, Mercosur countries will reduce tariffs on European industrial goods, including cars, which are in many cases prohibitive.
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Agreement with Mercosur. Ratification is necessary
The temporary application of the agreement means that the provisions of the agreement relating only to trade will be in force from May. In practice, this means the immediate abolition of customs duties and trade barriers. Other, non-trade issues will remain pending until full ratification, such as investment protection and public procurement.
In this case, ratification by the European Parliament and the Member States will be needed. Due to the identified doubts about the agreement, on January 21 the European Parliament supported the request to refer the case to the Court of Justice of the EU, which delays the entire procedure.
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The trade agreement will apply provisionally from May 1 between the EU and all countries in the South American bloc that complete ratification procedures and notify the EU before the end of March. Argentina, Brazil and Uruguay have already done so, and Paraguay recently ratified the agreement.
From May 1, the so-called a protective clause to the agreement, which is intended to respond to the concerns of farmers who anticipate an excessive inflow of Mercosur products to the EU. It will be activated if the prices of a given product in the EU drop by 5% as a result of imports from Mercosur. It will then be possible to increase customs duties on a given product or even introduce a ban on its import into the EU.
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Farmers' protests. The EU adopted the agreement despite the opposition of Poland and France
EU countries within the EU Council adopted the agreement at the beginning of January, with objections from, among others, Poland and France. The agreement was approved despite protests from farmers across Europe, including Poland. On January 17, the agreement was signed in the capital of Paraguay, Asuncion.
EU Trade Commissioner Marosz Shefczovicz stressed that the priority now is to “translate the EU-Mercosur agreement into concrete results, providing EU exporters with the platform they need to seize new opportunities for trade, growth and jobs.”
“The provisional application of the agreement will allow us to start delivering on this promise. I look forward to seeing this agreement realize its potential, strengthening our economy and consolidating our position in global trade,” he stressed.
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